This paper builds a two-sector, environmental model in which agents optimally choose the clean- and dirty-goods in order to balance the concern for social status and environmental quality. In contrast to the conventional notion, we Önd that greater social aspirations in consumption regardless of either clean or dirty goods can lead to a deterioration in economic growth, provided that conspicuous goods are relatively labor-intensive. Besides, in the presence of conspicuous consumption, employment and growth may be negatively correlated, which provides theoretical support to the empirical evidence.
